As the Hispanic Population Surges in the United States

Number of Latin-Owned Businesses Increases, Total Buying Power Also Rises

<*C*p(0,0,0,11,0,0,G,"U.S. English")>By Cynthia Beisiegel
The U.S. Hispanic population has seen phenomenal growth over the past several years, and along with that, a boom in Hispanic-owned businesses.

According to the U.S. Census Bureau, there are an estimated 40 million Hispanics residing in the United States and its outlying territories. The number of prosperous Hispanic households (those with incomes of $100,000 or more) has increased 137 percent between 1990 and 2000.

The U.S. Census Bureau considers Hispanic as an origin when conducting the census.

“The federal government treats Hispanic origin and race as separate and distinct concepts. In surveys and censuses, separate questions are asked on Hispanic origin and race. The question on Hispanic origin asks respondents if they are Spanish, Hispanic or Latino. Starting with Census 2000, the question on race asks respondents to report the race or races they consider themselves to be. Thus, Hispanics may be of any race.”

The population continues to increase rapidly.

“As far as the increase of the Hispanic population nationwide over the past couple of years, what we found in 2004 is that the Hispanic population nationwide was 41.3 million,” said Robert Bernstein, public information officer for the U.S. Census Bureau. “That’s up from 39.9 million as of July 1, 2003. So in that one year period, the Hispanic population nationwide grew by 1.4 million or 3.6 percent.”

Driving the growth is the traditional Hispanic emphasis on family. “Hispanics in general tend to have a higher fertility rate than the rest of the U.S. population, so the ones that are born here and the ones that come here tend to have slightly larger families,” said Andrea Lehman, business economist for Hispanic Business Inc. “Immigration is also a big part of it.”

According to the United States Hispanic Chamber of Commerce, Hispanic-owned businesses totaled 1.6 million in 2002, up 31 percent from 1997. Their receipts were $226.5 billion, up 22 percent from 1997. A total of 199,725 Hispanic-owned businesses had paid employees and their receipts totaled $184 billion, or about $921,090 per firm. Hispanic-owned businesses with no paid employees numbered 1.4 million, up 39 percent from 1997. They had receipts of $42.5 billion, up 54 percent from 1997. Average receipts of these businesses were $30,925 per firm. Additionally, Hispanic-owned firms claimed between 15 and 22 percent of businesses in New Mexico, Texas, Florida and California.

“Hispanics face a lot of barriers in the labor market, because on average they tend to have less education and there are language skill barriers, so often times you see that Hispanics are better off starting their own businesses,” Lehman said. “You see a lot of entrepreneurship among Hispanics.”

Popular industries for entrepreneurialship among Hispanics include construction, service and retail, and agriculture.

In addition, there’s been impressive growth in the area of Latina-owed businesses. According to the Center for Women’s Business Research, there are an estimated 553,618 majority-owned, privately-held Hispanic women-owned firms in the U.S., employing 320,000 people, and generating nearly $44.4 billion in sales. Between 1997 and 2004, the number of Hispanic women-owned firms has increased by 63.9 percent and sales have grown by 62.4 percent. Employment has also increased by 36.4 percent over this period.

The Center also reported that more than one-third (34.9 percent) of all Hispanic-owned firms are owned by women. Hispanic women-owned firms employ 18.5 percent of the workers in all Hispanic-owned firms and generate 16.3 percent of the sales. More than half (58.1 percent) of all Hispanic women-owned firms are in the service sector; 13.3 percent are in retail trade; and 5.4 percent are in goods-producing industries. A substantial portion are in unclassified industries (14.2 percent). The greatest growth by industry in the number of Hispanic women-owned firms from 1997 to 2004 is in the transportation, communications, and public utilities industry with 72.5 percent growth; followed by services (62.4 percent) and construction (50.6 percent).

Finally, the Selig Center reported that in 2002, the 10 states with the largest Hispanic markets by spending power were: California, Texas, Florida, New York, Illinois, New Jersey, Arizona, Colorado, Georgia and New Mexico. According to HispanTelligence, the research arm of Hispanic Business Inc., U.S. Hispanic purchasing power is at nearly $700 billion, and expected to reach as much as $1 trillion by 2007.

Topics USA